The “paper” gold market is much bigger than the physical gold market. You can make as much “paper” gold as you want, as long as no one comes to the window to cash in the “paper” gold for physical gold.
This is the only explanation. The laws of supply and demand dictate that gold should be going much, much higher. I suspect that it will, eventually, but not until those who are manipulating the market buy in at a purposely depressed level.
Actually, you can't. Exchange-traded ETF's are regulated in the same way other securities are, except the business has no moving parts, so it's extremely easy to audit. Here's an explanation of how GLD works.
Eventually, GLD should be near worthless as the physical stocks backing it dry up. Conversely, the premium that sellers can charge for the physical will rise as supply diminishes.
We will then have a better idea of the true value of physical.